Adding Fiscal Policy To Monetary Policy, QE and ZIRP.
Wednesday, 03 August 2016 | 5:11 am
Monetary policy has likely reached the limits of usefulness, not necessarily the limits of efficacy. The efficacy of monetary policy was questionable in the first place. Multiple QE programs and low interest rates have managed to inflate assets but not to spur the economy as much as was hoped. Monetary policy is but one class
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Japan. Will The BoJ Ease? How Big Is The Fiscal Package? What Else Can Japan Do?
Thursday, 28 July 2016 | 7:39 am
Observations: The BoJ’s discount rate, 9% in 1980 has fallen steadily to 0.3%. The 10 year JGB yield has dropped consistently from 8% in 1990 to -0.28%. The BoJ’s asset purchase programs have seen its balance sheet grow from 110 trillion JPY in 2010 to 436 trillion JPY expanding at 30% per annum. BoJ ownership
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What is Helicopter Money, WIll It Work and What Are The Risks?
Wednesday, 27 July 2016 | 1:56 am
What is Helicopter Money? There is still much confusion over what exactly ‘helicopter money’ means. In 1969, Milton Friedman coined the term in an extreme example to illustrate a point. “Let us suppose now that one day a helicopter flies over this community and drops an additional $1,000 in bills from the sky, which is,
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ECB LTRO. QE Lite But More Effective. Is European Demand For Credit Bottoming?
Wednesday, 20 July 2016 | 12:28 am
In December 2011 the ECB embarked on its first 3 year LTRO, or long term refinancing operations. This is basically a secured credit line available to banks posting eligible collateral. LTRO 1 was a great success raising 489 billion EUR which the banks used to purchase sovereign bonds and unwind inter Euro area current account
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Final Act For Falling Bond Yields and Interest Rates? QE + Fiscal Policy. Helicopter Moiney.
Monday, 18 July 2016 | 1:58 am
We have seen how effective QE can be. Not very. Not for Main Street at least. For Wall Street, QE has depressed bond yields and helped to camouflage the overvaluation of paper assets supporting them at inefficient levels for too long. More than that, the effectiveness of QE is wearing out like an over prescribed
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